ACIT (OSD) CIR 2(1), V. G.T L. LTD,

MA 746/MUM/2009

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4501 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 1998-1999
• Appeal Filed On: 09-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PARAS S SAVLA
• Keywords: Retrospective amendment; Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SMT. P.MADHAVI DEVI, JM & SHRI RAJENDRA SINGH, AM M.A.NO. 746/MUM/2009 - A.Y 1998-99 [ARISING OUT OF I.T.A.NO.4019/MM/2007] ASST. COMMISSIONER OF I.T [OSD] CIRCLE 21, MUMBAI VS. M/S GTL LIMITED, GLOBAL VISIONS, ESIL MIDC, TTC INDUSTRIAL AREA, NAVI MUMBAI 400 701 PAN NO. (APPLICANT) (RESPONDENT) REVENUE BY : MR. MOHD. USMAN. ASSESSEE BY : MR. K.SHIVRAM & MR.PARAS S.SAVLA. O R D E R PER P.MADHAVI DEVI, JM: THIS IS A MISCELLANEOUS APPLICATION FILED BY THE R EVENUE U/S.254[2] OF THE I.T.ACT. 2. BRIEF FACTS LEADING TO THIS MISCELLANEOUS APPLIC ATION ARE THAT THE ASSESSEE HAD FILED A RETURN OF INCOME FOR THE A.Y 1 998-99 ON 30/11/98 DECLARING THE TOTAL INCOME AT RS.11,62,10,850/- U/S .115JA OF THE ACT. AO COMPLETED THE ASSESSMENT ASSESSING THE TOTAL INC OME AT RS.34,63,78,187/-. THIS ORDER WAS SUBSEQUENTLY RECT IFIED AND MODIFIED ON THREE OTHER OCCASIONS. LATER ON, IT WAS NOTICED THAT THE PROVISION OF DOUBTFUL DEBTS OF RS.18,99,254/- WAS NOT ADDED BACK TO THE PROFIT & LOSS ACCOUNT WHILE COMPUTING DEDUCTION U/S.115JA OF THE ACT. THEREFORE, AO PASSED AN ORDER U/S.154 OF THE ACT ON 30-12-2004 ADDING BACK THE PROVISION FOR DOUBTFUL DEBTS U/S.11 5JA OF THE ACT. THIS 2 ORDER WAS CHALLENGED BY THE ASSESSEE BEFORE THE CIT (A) WHO ALLOWED THE SAME RELYING UPON THE DECISION OF THE BOMBAY HI GH COURT IN THE CASE OF CIT VS. ECHJAY FORGINS (P) LTD. [251 ITR 15 ]. THE REVENUE APPEALED AGAINST THE SAME TO THE ITAT AND THE TRIBU NAL VIDE ORDERS DATED 17-3-09 CONFIRMED THE ORDER OF THE CIT(A) BY PLACING RELIANCE UPON THE FOLLOWING DECISIONS 1. CIT VS. HCL COMNET SYSTEMS & SERVICES LTD. 205 ITR 409 [S.C] 2. CIT VS. ECHJAY FORGINGS P. LTD. 251 ITR 15 [BOM] 3. SPECIAL BENCH DECISION IN JCIT VS. M/S USHA MACHINE INDUSTRIES LTD. [2007] 104 ITR {S.B.} [KOL] THEREAFTER, BY THE FINANCE ACT, 2009 CLAUSE [G] HAS BEEN INSERTED IN EXPLANATION TO SEC.115JA[2]OF THE ACT W.R.E.F. A.Y 1998-99 AND SUBSEQUENT YEARS PROVIDING THAT PROVISIONS FOR DOUB TFUL DEBTS AND ADVANCES ARE DISALLOWABLE WHILE CALCULATING PROFIT U/S.115JA OF THE I.T.ACT . THE REVENUE HAS RELIED ON THE DECISION OF THE KARNATAKA HIGH COURT REPORTED IN 239 ITR 282 IN SUPPORT OF ITS CON TENTION THAT AN ORDER WHICH IS NOT IN ACCORDANCE WITH THE RETROSPEC TIVE LAW CAN BE RECTIFIED U/S.154 OF THE ACT. 3. THE LD.DR REITERATED THE CONTENTIONS RAISED IN THE MISCELLANEOUS APPLICATION, WHILE THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REVENUE HAS NOT BEEN ABLE TO POI NT OUT THE MISTAKE APPARENT FROM RECORD OF THE ORDER ON THE DATE WHEN IT WAS PASSED. IN SUPPORT OF HIS CONTENTION, HE PLACED RELIANCE UPON THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SUDHIR S.M EHTA [265 ITR 3 548], WHEREIN IT WAS HELD THAT ON RETROSPECTIVE AME NDMENT OF SEC.148(1) DELETING THE WORD NOT BEING LESS THAN T HIRTY DAYS BEING SUBSEQUENT TO THE TRIBUNALS ORDER STRIKING DOWN TH E NOTICE, THERE IS NO MISTAKE APPARENT FROM THE ORDER OF THE TRIBUNAL. HE SUBMITTED THAT AS HELD BY THE HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. THANA ELECTRICITY SUPPLY LTD. [206 ITR 727], THE D ECISION OF THE HIGH COURT IS BINDING ON THE SUB-ORDINATE COURTS AND AUT HORITIES OR TRIBUNAL IN ITS SUPERINTENDENCE THROUGHOUT THE TERRITORIES I N RELATION TO WHICH IT EXERCISES JURISDICTION. THUS, ACCORDING TO HIM, THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF SUDHRI S.MEHTA [CI TED SUPRA] IS BINDING ON THIS TRIBUNAL. AS REGARDS THE RELIANCE P LACED UPON BY THE LD.DR ON THE DECISION OF THE KARNATAKA HIGH COURT I N THE CASE OF M.SRINIVASALU VS. UOI 239 ITR 282, HE SUBMITTED THA T IT IS DISTINGUISHABLE ON FACTS AS THE ASSESSEE THEREIN HA D CHALLENGED THE VALIDITY OF SEC.148 AS VIOLATIVE OF ARTICLE 14 AND 19[1][G] IN A WRIT PETITION AND THE HIGH COURT HELD THAT THE PARLIAME NT CAN ENACT THE LAW PROSPECTIVELY OR RETROSPECTIVELY. THUS, ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE, THE SAID DECISION IS NOT APPLICABLE T O THE CASE BEFORE US. 4. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THEIR RIVAL CONTENTIONS, WE FIND THAT THE TRIBUNALS ORDER IS D ATED 17 TH MARCH, 2009 WHEREAS THE RETROSPECTIVE AMENDMENT OF THE ACT HAS RECEIVED THE ASSENT OF THE PRESIDENT OF INDIA ON 19-8-2009 I.E. AFTER THE ORDER OF THE TRIBUNAL WAS PASSED. SIMILAR WERE THE FACTS OF THE CASE BEFORE THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SUDHA S. M EHTA [CITED 4 SUPRA], WHEREIN THE TRIBUNALS ORDER WAS DATED 26-6 -96 WHEREAS THE LAW WAS AMENDED RETROSPECTIVELY W.E.F. 1-4-1989 AND THIS AMENDMENT WAS ASSENTED TO BY THE PRESIDENT OF INDIA ON SEPTEM BER, 28, 1996 I.E. AFTER THE ORDER OF THE TRIBUNAL WAS PASSED. AFTER T AKING THESE FACTS INTO CONSIDERATION THE HONBLE BOMBAY HIGH COURT HELD TH AT THE PROCEEDINGS GOT CONCLUDED BEFORE THE TRIBUNAL UNDER THE THEN EXISTING LAW AND, THEREFORE, THERE WAS NO MISTAKE APPARENT F ROM RECORD IN THE ORDER OF THE TRIBUNAL DATED 26-2-1996. AS THIS IS A DECISION OF THE JURISDICTIONAL HIGH COURT THIS TRIBUNAL IS BOUND BY THE SAME. OTHERWISE ALSO THE DECISION OF THE KARNATAKA HIGH COURT IN TH E CASE OF M.SRINIVASALU VS. UOI [CITED SUPRA], RELIED UPON BY THE LD.DR IS DISTINGUISHABLE ON FACTS AS SUBMITTED BY THE LD.COU NSEL FOR THE ASSESSEE. IN VIEW OF THE SAME, WE AGREE WITH THE AS SESSEE THAT THERE IS NO MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL. IN VIEW OF THE SAME, REVENUES MISCELLANEOUS APPLICATI ON IS ACCORDINGLY DISMISSED. 5. IN THE RESULT, REVENUES MISCELLANEOUS APPLICATI ON IS DISMISSED. ORDER PRONOUNCED ON THIS 10 TH DAY OF MARCH, 2010. SD/- SD/- (RAJENDRA SINGH) (P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 10 TH MARCH, 2010. P/-*